Delayed startups at Louisiana chemical plants caused by downed transmission lines in the wake of Hurricane Laura could squeeze several markets that are already tight, an Independent Commodity Intelligence Services, or ICIS, analysis indicates.
All nine transmission lines that deliver power into Lake Charles and southwestern Louisiana were knocked out of service, Entergy has said.
Lake Charles is a petrochemical hub, with a concentration of facilities that make ethylene, a building block used to make PE and monoethylene glycol. PE is a plastic used in packaging, and it was already in high demand because of the coronavirus. MEG is used to make polyethylene terephthalate, or PET, another plastic used to make packaging and beverage bottles.
Plants in Lake Charles also make propylene, a building block used to make polypropylene, a plastic used to make packaging and durable goods.
Lake Charles plants make caustic soda and chlorine as well as ethylene dichloride and vinyl chloride monomer, which could impact the PVC market.
Lake Charles does not make any PVC, but it ships feedstock to other plants in the U.S. that make the plastic. Similarly, plants in Lake Charles ship MEG to those that make PET.